Statoil Establishes Eagle Ford Fund

October 25, 2016 Elizabeth Alford

International energy company, Statoil, announced the creation of a new fund to benefit the Eagle Ford Shale region of south Texas.

Related: Statoil in the Eagle Ford

Statoil Gulf Services LLC has established the Statoil Gulf Services LLC Advised Fund, which will provide grants to first responders and to schools with science, technology, engineering, and math (STEM) education programs within the Eagle Ford.

The fund will be managed by the Coastal Bend Community Foundation and will focus on activities in Bee, DeWitt, Karnes, Live Oak, LaSalle, and McMullen counties.

As a founding member of the South Texas Energy & Economic Roundtable (STEER), Statoil actively contributes to connecting the oil and natural gas industry to South Texas communities. Among their efforts include support of the Karnes County Eagle Ford Energy S.T.E.M. camp, and the Chisholm Trail Heritage museum and events such as George West Storyfest and Yorktown Western Days.

Statoil has been active in the Eagle Ford formation since 2010 through a joint venture. In 2013, they became operator of the eastern portion of the asset, and have since continued to improve our operations, reducing our footprint locally and becoming even more efficient. The company has approximately 71,000 net acres in the play.

Kinder Morgan: Eagle Ford Contributes to Decreased Volumes

October 24, 2016 Elizabeth Alford

Kinder Morgan, Inc (KMI) announced its third quarter results last week, saying they are ‘pleased’ with operational performance despite weak market conditions.

President and CEO, Steve Kean said the company’s Eagle Ford assets have continued to experience lower production, which is affecting the company’s total volumes.

Natural gas gathered volumes were down 17% from the third quarter last year due primarily to lower natural gas volumes on multiple systems gathering from the Eagle Ford Shale
Natural gas transport volumes were down 1% compared to the third quarter last year, driven by lower throughput on the Texas Intrastate Natural Gas Pipelines due to lower Eagle Ford Shale volumes

The company claims that about 38% of the natural gas consumed in the United States moves on KMI pipelines. During an earnings call, Executive chairman Rich Kindertouched on the current controversies surrounding new pipeline projects around the country.

“While the protestors tend to get the headlines, it is still possible to build out new infrastructure. This quarter for example, we completed an expansion on our Texas Gas pipeline network.”

Kinder Morgan Quarterly Highlights:

The company revealed a net loss available of $227 million, compared to net income of $186 million for the third quarter of 2015.
Cuts 2016 capital budget to $3.3 billion from its previous estimate of $4.2 billion
Disclosed a $285 million writedown mainly in its carbon dioxide segment, said it does not expect to access the capital markets to fund growth projects in 2016.
Delayed completion of $5.4 billion Trans Mountain Pipeline expansion to the third quarter of 2019
Combined gross oil production volumes averaged 53.7 MBbl/d for the third quarter, down 6 percent from 57.3 MBbl/d for the same period in 2015

“Let me give you this warning, if commodity and equity prices continue to fall, then we may have impairments in future quarters.””

— Chief Financial Officer Kimberly Allen Dang

Kinder Morgan shares hit a record low of $11.20 last Wednesday, before trading down 2.6 percent at $11.70 after hours.

Eagle Ford Rig Count Gains One, Remains Sluggish

October 21, 2016 Elizabeth Alford

The Eagle Ford Shale rig count gained slightly this week, with 39 rigs running across our coverage area by midday Friday.

In recent Eagle Ford news, U.S. Energy Information Administration (EIA) is forecasting shale oil production to fall for a 12th consecutive month in November with the Eagle Ford taking the biggest hit.

A total of 551 oil and gas rigs were running across the United States this week, a gain of 14 from last week. 108 rigs targeted natural gas (three more than the previous week) and 443 were targeting oil in the U.S. (11 more than the previous week). The remainder were drilling service wells (e.g. disposal wells, injection wells, etc.) 254 of the rigs active in the U.S. were running in Texas.

Baker Hughes reports its own Eagle Ford Rig Count that covers the 14 core counties. The rig count published on EagleFordShale.com includes a 30 county area impacted by Eagle Ford development. A full list of the counties included can be found in the table below.

Eagle Ford Oil & Gas Rigs

Six rigs in the Eagle Ford region targeted natural gas this week with the commodity trading at $2.96/mmbtu.

33 Eagle Ford rigs were targeting oil with WTI oil prices gaining slightly to $50.85 .

A total of 37 rigs are drilling horizontal wells, zero are drilling directional wells and two are vertical.

Karnes and LaSalle leads production this week with seven rigs each in production. See the full list below in the Eagle Ford Shale Drilling by County below.

Eagle Ford Shale Drilling by County

Eagle Ford Shale News

Lucas Energy Re-Activates Eagle Ford Assets

Chesapeake Faces Antitrust Investigation

EIA: Eagle Ford Shale the Biggest Loser

Texas Tax Revenues Drop 3.9%

Sanchez Production Partners to Acquire New Eagle Ford Assets

What is the Rig Count?

The Eagle Ford Shale Rig Count is an index of the total number of oil & gas drilling rigs running across a 30 county area in South Texas. The South Texas rigs referred to in this article are for ALL drilling reported by Baker Hughes and not solely wells targeting the Eagle Ford formation. All land rigs and onshore rig data shown here are based upon industry estimates provided by the Baker Hughes Rig Count.

Lucas Energy Re-Activates Eagle Ford Assets

October 20, 2016 Elizabeth Alford

**Lucas Re-activates Wells in the Eagle Ford**

Lucas Energy re-energizes their activity in the Eagle Ford.

This morning, executives of Lucas Energy announced they recently completed two wells in Karnes County in addition to re-activating their Griffin 1H Austin Chalk well. The first tests on the Griffin 1H is showing production of 55 boe/d after having produced 5 Boe/d prior to shut-in.

“In south Gonzales County, Lucas has participated in the Cyclone #9H well that tested 598 barrels of oil equivalent per day (Boe/d) and a 30-day initial production rate of 486 Boe/d. The Cyclone #10H tested 631 Boe/d and a 30-day initial production rate of 521 Boe/d. Originally estimated to cost an average of $5.2 million, these wells have been drilled and completed at an average cost of $4.7 million. Both are producing approximately 90% crude oil from a processed three-stream basis on a 18/64″ choke. Lucas owns an 8% working interest in these two wells.”

In August, Lucas Energy announced that its wholly-owned subsidiary, CATI Operating, LLC will borrow $1 million to fund drilling, completion and maintenance projects in the Eagle Ford Shale. The company will enter into a joint operating agreement with Lonestar Resources that will cover over 1,450 gross acres. Lucas will have a 8% -14% working interest in the units.

“As we ramp up production on our legacy and newly-acquired assets, the Company continues to aggressively pursue acquisition opportunities with both producing and nonproducing reserves. ”

— Anthony C. Schnur, the Chief Executive Officer of Lucas Energy

Second quarter highlights for Lucas’ Eagle Ford assets include:

Placed two new Eagle Ford shale wells on stream during May of the quarter
Crude oil production rose 17% sequentially in the second quarter as Lonestar’s 2016 completions have all been in the crude oil window.
Net loss of $12.8 million for 2Q16 versus a net loss of $8.4 million in 2Q15
Adjusted EBITDAX was $16.0 million compared to $22.0 million for 2Q15

EIA: Eagle Ford Shale the Biggest Loser

October 17, 2016 Elizabeth Alford

**Eagle Ford Production Continues Decline**

The Eagle Ford Shale is expected to see the biggest production declines in the industry for both oil and gas next month.

U.S. Energy Information Administration (EIA) released its latest drilling productivity report today that forecasts shale oil production was expected to fall for a 12th consecutive month in November.

The agency predicts that the Eagle Ford will be the hardest hit with a regional decline of almost 0.2 bcfd for natural gas from October to 5.6 bcfd in November. This is the lowest level of output in the basin since November 2013. For oil, the Eagle Ford is set to drop by 35,000 bpd to 947,000 bpd.

Total oil production for November is expected to fall by 30,000 barrels per day to 4.43 million bpd, the lowest output since March 2014. Total natural gas production will decline for a seventh consecutive month in November to 46.0 billion cubic feet per day, the lowest level since July 2015.

In September,the University of Texas’ Bureau of Economic Geology released new research that shows there are still billions of barrels to be recovered in fields across the Eagle Ford. Highlights of the study include:

The play holds an estimated 230 billion barrels of oil (only 10 billion can be recovered now)
The play has an estimated 462 trillion cubic feet of natural gas, with 34 trillion cubic feet recoverable.
At least 80,000 more wells will be drilled